DOJ and Penguin reach settlement in e-books suit

Yesterday, the Department of Justice (DOJ) announced that it has settled its suit against Pearson Plc’s Penguin Group over accusations the publisher fixed prices on e-books.

The case first made headlines in April, when the DOJ filed suit claiming Apple and five other publishers, including Penguin, colluded to fix prices in an effort to beat online retail giant Amazon in sales. Amazon is the leader in the e-book market. Apple denied any wrongdoing.

The DOJ, which also sued and settled with Google in a separate e-book battle, said Apple talked the five publishers into using the “agency model,” which allows the publishers to set the prices of books while Apple took a 30-percent chunk of all sales.

According to the settlement, Penguin will end its agreement with Apple and any other e-book sellers that prevent discounting the prices of the e-books, and it is prevented from entering any deals for two years.

The DOJ reached similar settlement agreements with three of the other publishers—Hachette, HarperCollins and Simon & Schuster—in October. The fifth publisher, Macmillan, has not yet settled.

Also, see other InsideCounsel stories about the ongoing legal battles over digital books: